Community Interest Companies - CICs limited by Shares & Inheritance Tax

Please can you clarify whether BPR applies to community interest companies limited by shares? These have an Asset Lock and a Dividend Cap - If they are valued for IHT purposes then surely they would be worth less than the balance sheet value? How is a community interest company valued for IHT? Please can you clarify this for CIC's limited by shares Thanks

Hi,
Generally, BPR applies to businesses that are actively trading and do not focus mainly on holding investments or generating income from land or property. Most CICs engage in community-benefiting trading activities, which may help meet this requirement. However, HMRC assesses each case individually, so the specific nature of the CIC’s activities will be key. Asset Lock and Dividend Cap restrict a CIC’s ability to distribute profits and assets, which aligns with their community focus. For BPR, though, these restrictions are not direct disqualifiers but may influence the company’s market value, as you mentioned. 
I would advise you to consult with a tax advisor or specialist in BRP as the specifics of the CIC’s activities and structure may affect eligibility.
Thank you.
 

Thanks for your reply. How would you determine the market value of a CIC limited by shares that has a dividend cap?

Hi ,
 

Thank you for your query, unfortunately we are unable to advise on this . You will need to acquire the services of a Tax professional to provide you with Tax Advice . Thank you .